Baltic Dry Index. 1484 +07 Brent Crude 76.50
There can be few fields of human endeavour in which history counts for so little as in the world of finance. Past experience, to the extent that it is part of memory at all, is dismissed as the primitive refuge of those who do not have the insight to appreciate the incredible wonders of the present.John Kenneth Galbraith.
Today and all weekend
all eyes are on President Trump. When will he push the button that opens heavyweight
tariff fire on China? China has promised to respond in kind. The pea shooter
tariff war is about to end, a very real trade war is about to get underway.
On a side issue, will
Trump pull the NAFTA plug on Canada this weekend? Or has all the paranoia
underway in Washington, delayed Trump’s next salvo in his trade war on friend
and foe alike? With the crucial US mid-term elections getting closer by the
day, President Trump is in full campaign mode. Any delay is likely to be brief.
President Trump needs to fire up his base.
My guess is that
Europe will return to the Trump firing line shortly after China. It’s a big
easy target and a popular target for Trumps core supporters. So far not a
single extra US soybean has set sail for Europe that wasn’t already headed
there. Nor a single cargo of US oil or gas.
Below, a nervous
world waits on erratic President Trump.
“Just
because you're paranoid doesn't mean they aren't after you.”
Catch-22.
September 7, 2018 / 1:33 AM
Asia shares worn down by trade tension, yen a safe harbour
SYDNEY
(Reuters) - Asian shares carved out a 14-month trough on Friday as investors
feared a new salvo of Sino-U.S. tariffs could come at any moment, while a slump
in U.S. chip stocks rippled through the tech-heavy region.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 0.4 percent, having earlier reached its lowest since mid-July last year.
The Nikkei .N225 shed 1 percent, undermined by a rising yen and reports U.S. President Donald Trump could be contemplating taking on Japan over trade.
Chinese blue chips .CSI300 managed a 0.8 percent bounce as beaten-down health care stocks found buyers after taking a savaging in recent months amid vaccine scandals.
Emerging markets in the region were struggling to steady after a
punishing week, with Indonesia and the Philippines still badly scarred by fears
of capital flight following crises in Argentina and Turkey.
Nerves were set to be frayed further as the public comment period for
proposed tariffs on an additional $200 billion worth of Chinese imports ends at
0400 GMT. The tariffs could go into effect shortly afterward, though there was
no clear timetable.
China has warned of retaliation if Washington launches any new measures.
“It seems unlikely the tariffs are not implemented as the U.S.
administration believes that they are winning the trade war and will be in a
stronger position to negotiate if they put more pressure on China,” JPMorgan
analysts wrote in a note.
“The tech sector was also very weak overnight, with a slide in Micron of
almost 10 percent and further weakness in the Chinese Internet ADRs.”
More
Live Now: Latest Developments in Trump's Trade War With China
September 7, 2018 — 5:00 AM BST
If President Trump wants to follow through on his repeated threats to
label China a currency manipulator, all he has to do is turn back the clock,
writes my colleague Saleha Mohsin.
The Treasury Department hasn’t accused China of artificially suppressing
the value of the yuan because it relies on a 2015 law that sets strict
standards for the designation. But a 1988 law -- still in effect -- sets a
looser standard. Treasury Secretary Steven Mnuchin simply has to use it, said
several former department officials.
----An escalation in the global trade war could knock 0.4 percent off global
growth next year, according to Fitch Ratings.
Its trade war escalation scenario includes further U.S. tariffs on $400
billion of imports from China at 10 percent; additional China retaliation to
U.S. levies; U.S. imposing 25 percent tariffs on all automobiles and auto parts
imports, my colleagues Lananh Nguyen and Alexandra Stratton report.
Fitch chief economist Brian Coulton said in a presentation
``The U.S. Has a relatively large shock in this scenario,'' because
``the U.S. is picking the trade fight.''
To assess how China is holding up in the trade war, Guangdong is a good
place to start. Recent indicators reveal strain on its export-oriented
manufacturing sector, writes Qian Wan, Bloomberg's China economist.
This is a concern -- the coastal province accounts for 11 percent of
China’s GDP and 28 percent of its exports, and is known for a dynamic private
sector. If it were a country, Guangdong would be the 15th largest economy in
the world -- ahead of Mexico. Read more here:
More
September 6, 2018 / 2:26 PM
U.S.-Canada trade talks grind on, but 'final' issues unresolved
WASHINGTON (Reuters) - U.S. and Canadian negotiators pushed ahead in
grinding talks to rescue the North American Free Trade Agreement on Thursday,
but a few stubborn issues stood in the way of a deal, including dairy quotas,
protection for Canadian media companies, and how to resolve future trade
disputes.
A U.S. source familiar with the discussions in Washington said it was
still unclear whether the two sides could bridge the gaps or whether President
Donald Trump will opt for a Mexico-only bilateral trade deal.
“We’re down to three issues: Chapter 19, the cultural issues and dairy.
We’ve created leverage and driven Canada to the table,” the source said. “Part
of our problem is that Canada has been backsliding on its commitments (on
dairy).”
NAFTA’s Chapter 19 governs how disputes are resolved.
Trump has set a deadline for a deal this week, prompting aides to U.S.
Trade Representative Robert Lighthizer and Canadian Foreign Minister Chrystia
Freeland to work well into the evening on Thursday to find ways to move
forward.
Bloomberg News cited a Canadian government official as saying that a
deal was not expected to be reached this week.
“We are making good progress,” Freeland told reporters following a short
meeting with Lighthizer at the USTR offices on Thursday evening.
She repeated her earlier statements that the day’s discussions were
“constructive and productive” amid an atmosphere of “goodwill on both sides.”
She declined to discuss specific issues under negotiation but said talks
would resume on Friday.
The Republican chairman of the U.S. House of Representatives Ways and
Means Committee, Kevin Brady, a powerful voice in Congress on trade, told
reporters that differences remained between the two sides over Canada’s dairy
quota regime, a trade dispute resolution settlement procedure and “other longstanding
issues.”
More
Finally, GB still
playing at Empire alienates the new century’s rising Empire. China puts a shot
across the Royal Navy’s bow, but did HMS Pinafore just sink any post Brexit
trade deal with China? What were they thinking in Whitehall and the Admiralty?
September 7, 2018 / 1:58 AM
Major Chinese paper warns Britain on trade talks after warship sail-by
BEIJING/SHANGHAI
(Reuters) - Britain could have hurt its chances of sealing a post-Brexit free
trade deal with China, a major Chinese state-run newspaper warned on Friday
after a Royal Navy warship sailed close to islands in the South China Sea
claimed by China.
China and Britain agreed last month to look at the possibility of
reaching a “top notch” post-Brexit free trade deal which, if struck, would be
an important political win for Britain’s Conservative government.
“China and the UK had agreed to actively explore the possibility of
discussing a free trade agreement after Brexit. Any act that harms China’s core
interests will only put a spanner in the works,” the official China Daily
newspaper said in an editorial.
Britain has long courted China for a post-Brexit trade deal and talked
up a “golden era” in ties, although any formal talks could not begin until
Britain officially leaves the European Union next year and typically take many
years to conclude.
The
HMS Albion, a 22,000 ton amphibious warship, sailed near the Paracel Islands
claimed by China last month, Reuters reported on Thursday, prompting an angry
reaction from China which called it a “provocation”.
The Paracels are occupied entirely by China but also claimed by Vietnam
and Taiwan.
China’s claims in the South China Sea, through which some $3 trillion of
shipborne trade passes each year, are contested by Brunei, Malaysia, the
Philippines, Taiwan and Vietnam. Britain does not have any territorial claims
in the area.
The China Daily said Britain was trying to “curry favor” with the United
States, which has been pushing for more international participation in freedom
of navigation operations in the strategic waterway.
“Now that it is eyeing the U.S. as an economic lifeline after it exits
the European Union - the United Kingdom is no doubt eager to seize whatever
opportunity it can to get into Washington’s good books,” the English-language
newspaper said.
----Adding to the tension, China’s Foreign Ministry late on Thursday said Britain should stop “gesticulating” about the former British colony of Hong Kong and interfering in China’s internal affairs, after Britain issued its latest six-monthly report on the city.
In it, British Foreign Secretary Jeremy Hunt noted the “growing concern
about the extent of freedom of speech in Hong Kong, particularly in the context
of discussion of independence”, while also stating that Britain does not think
independence is a realistic or desirable option.
China said the issue of independence had nothing to do with freedom of
speech and was a serious violation of China’s constitution and Hong Kong law.
More
I
grew so rich that I was sent
By
a pocket borough into Parliament
I
always voted at my party's call
And
I never thought of thinking for myself at all
No, he never thought of thinking for himself at all
I
thought so little, they rewarded me
By
making me the Ruler of the Queen's Navy
He thought so little, they rewarded he
By making him the Ruler of the Queen's Navy
Gilbert
and Sullivan, HMS Pinafore.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally doubled over.
Today, more Trump trade war
wobbles. Just wait until Trump thumps German auto exports.
September 6, 2018 / 7:08 AM
Trump trade threats bite into German factory orders
BERLIN
(Reuters) - German industrial orders fell unexpectedly in July on weak foreign
demand, data showed on Thursday, in a further sign that factories in Europe’s
largest economy are feeling the bite of U.S. President Donald Trump’s
protectionist trade policies.
The Federal Statistics Office said contracts for “Made in Germany” goods
were down by 0.9 percent after a revised plunge of 3.9 percent in the previous
month.
The reading undershot a Reuters poll of analysts who had predicted a
rise of 1.8 percent.
The Ifo economic institute said, however, that Germany’s economic
upswing will continue as a strong domestic economy is providing a buffer
against external shocks.
“We are currently facing a strong economic upswing in Germany,” Ifo
economist Timo Wollmershaeuser said. “It will be largely driven by private
consumption this year and next, helped by rising employment and strong income
growth.”
The Ifo institute raised its 2018 growth forecast for Germany to 1.9
percent from 1.8 percent previously, citing a better-than-expected performance
in the first half of the year.
It forecasts gross domestic product growth rates of 1.9 percent in 2019
and 1.7 percent in 2020.
The DIW economic institute and the IWH research group said separately
that they predicted German growth of 1.8 percent in 2018 and 1.7 percent in
2019.
“There
are no signs of an economic slump,” DIW chief economist Claus Michelsen said.
“However, companies are investing only hesitatingly for the time being,
among other things because their sales outlook is clouded by trade conflicts,”
he added.
Trump has triggered trade disputes with China, Europe and many others
regions by imposing steep tariffs on a broad range of products in his pledge to
protect American jobs against what he calls unfair trade practices.
More
Technology Update.
With events happening fast in the
development of solar power and graphene, I’ve added this section. Updates as
they get reported. Is converting sunlight to usable cheap AC or DC energy
mankind’s future from the 21st century onwards?
September 6, 2018 / 12:26 AM
World’s largest offshore wind farm opens off northwest England
LONDON (Reuters) - The world’s largest offshore wind farm
will open on Thursday off the northwest coast of England when Danish energy
group Orsted (ORSTED.CO)
unveils the Walney Extension project.
The wind farm has a capacity of 659 megawatts (MW), enough
to power almost 600,000 homes, and overtakes the London Array off England’s
east coast which has a capacity of 630 MW.
Walney Extension is made up of 87 turbines built by Siemens Gamesa (SGREN.MC)
and MHI Vestas, and covers 145 square kilometres (55 square miles), which is
equivalent to around 20,000 football pitches. The 40 eight-megawatt MHI Vestas turbines being used stand 195 metres (213 yards) tall and are the largest wind turbines in operation globally.
Orsted said they have been optimised to generate as much as 8.25 MW each.
Matthew Wright, Orsted UK managing director, told Reuters in an
interview Britain’s offshore success was due to a combination of strong wind
speeds and shallow waters in the North Sea and Irish Sea as well as continued
support from the government.
“For the last 10 years governments of all colours have supported
renewable energy and offshore wind in the UK, leading to a thriving industry,”
he said.
Britain is the world’s largest offshore wind market, hosting 36 percent
of globally installed offshore wind capacity, data from the Global Wind Energy
Council showed.
Walney Extension was among the first renewable projects to secure a
so-called contract for difference (CFD) subsidy from the British government in
2014.
The contract guarantees it a minimum price for electricity of 150 pounds
($195) per megawatt hour (MWh) for 15 years.
Since this was awarded, the cost of offshore wind has fallen
dramatically to a low of 57.50 pounds per MWh in the last auction held in 2017.
Blades for both sets of turbines were made at British factories, in Hull
and the Isle of Wight, and Wright said the company was keen to use local
facilities.
“Approximately 50 percent of the value of the project over its lifetime
will have come from UK sources,” he said.
Walney Extension is a shared-ownership project between Orsted (50
percent) and two Danish pension funds - PFA and PKA (25 percent each).
Another weekend and everyone waiting to see if Trump’s
treasonous mole will get exposed. Never a dull moment in Washington these days,
what else could go wrong this weekend. Have a great weekend everyone.
“It was miraculous. It was almost no trick at
all, he saw, to turn vice into virtue and slander into truth, impotence into
abstinence, arrogance into humility, plunder into philanthropy, thievery into
honor, blasphemy into wisdom, brutality into patriotism, and sadism into
justice. Anybody could do it; it required no brains at all. It merely required
no character.”
Catch-22.
The monthly Coppock Indicators finished August.
DJIA: 25,965 +207 Down. NASDAQ:
8,110 +265 Up. SP500: 2,902 +168 Up.
All
three slow indicators moved down in March, but the S&P and NASDAQ have now turned
up. September will be critical for
confirmation of this change.
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